Ivy v. Day

254 So. 2d 136, 1971 La. App. LEXIS 6528
CourtLouisiana Court of Appeal
DecidedOctober 22, 1971
DocketNo. 3556
StatusPublished
Cited by2 cases

This text of 254 So. 2d 136 (Ivy v. Day) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ivy v. Day, 254 So. 2d 136, 1971 La. App. LEXIS 6528 (La. Ct. App. 1971).

Opinions

HOOD, Judge.

Plaintiff, William Ivy, Jr., obtained a default judgment against defendants, Mr. and Mrs. Clyde H. Day, for the amount claimed to be due on two promissory notes, with recognition of mortgages securing those notes. The mortgaged property was seized and sold at two separate public sales to satisfy that judgment. After each such sale, John Makar intervened, alleging that he is the holder of a note secured by a mortgage affecting the same property, and demanding that he be paid by preference out of the proceeds of the sales. Judgment was rendered by the trial court dismissing Makar’s intervention to the last sale, and decreeing that Ivy is entitled to first priority on the proceeds of that sale. Intervenor Makar has appealed. We affirm.

The central issue presented is whether the mortgage which secures the note held by intervenor Makar primes either or both of the mortgages securing the indebtedness of Mr. and Mrs. Day to plaintiff Ivy.

The record shows that when this suit was filed originally Ivy was the owner of two promissory notes executed by Mr. and Mrs. Day, made payable on demand to the order of “Ourselves or any Future Holder,” and endorsed in blank by the makers. One of these notes, dated August 2, 1963, was for $2,000.00, and it was secured by a mortgage on a 40-acre tract of land in Vernon Parish. The other note, dated August 12, 1963, was for $12,000.00, and it was secured by a mortgage affecting an 8.84-acre tract in the same parish. Each of these mortgages was filed for record in the mortgage records of Vernon Parish on the day the note which it secured was executed.

Intervenor Makar is the holder of a promissory note for $50,000.00, dated September 26, 1963, signed by Mr. and Mrs. Day, and made payable on demand to the order of “Future Holder or Holders.” This note was secured by a mortgage affecting both of the tracts of land which had been mortgaged to secure the notes held by Ivy. The Makar mortgage was recorded in the mortgage records of Vernon Parish on September 27, 1963, which was more than six weeks after the Ivy mortgages had been filed and recorded. According to the mortgage records, therefore, Makar was the holder of a second mortgage on these two tracts of land.

Ivy instituted this suit on February 24, 1967, demanding judgment for the face amount of the two notes held by him, and for recognition of the mortgages which secured these notes. No answer was filed by defendants, and a default judgment was rendered on June 19, 1967, in favor of Ivy and against Mr. and Mrs. Day, for “the full sums of $2,000.00 and $12,000.00,” plus interest and attorney’s fees. The judgment also decreed that “the mortgages be recognized and maintained.” No appeal was taken, and that judgment now has become final.

After this judgment was rendered, Ivy had a writ of fieri facias issued, and pursuant to that writ the 40-acre tract of land [139]*139affected by the $2,000.00 mortgage was seized and sold at public sale to satisfy the judgment. That sale was held on September 10, 1968. Immediately following that sale Makar intervened, seeking a judgment determining the rank of the mortgages on the property sold and decreeing that Makar should be paid in preference to Ivy from the proceeds of the sale. The proceeds of that sale were paid into the registry of the court, and they have not yet been distributed. There is no formal judgment in the record determining the issues presented by that intervention.

Ivy then had another writ of fieri facias issued, and pursuant to that writ the 8.84-acre tract of land affected by the $12,000.00 mortgage was seized and sold at public sale to satisfy the judgment. That sale took place on June 4, 1969. Makar intervened after that sale, praying for judgment determining the rank of mortgages on that property and ordering that he be decreed to have a priority on the proceeds of the sale. At the sale held on the last mentioned date, the 8.84-acre tract of land was adjudicated to Makar, he being the highest bidder, for a price of $21,667.00. That sum was deposited in the registry of the court, and eventually a bond was substituted for the cash. The proceeds of the last mentioned sale have not been distributed.

The interventions, or at least the last intervention, filed by Makar were tried and judgment was rendered by the trial court on March 5, 1970, (1) dismissing the last petition of intervention filed by Makar, (2) decreeing that the judgment for $12,000.00 in favor of Ivy and against Mr. and Mrs. Day is secured by a first lien and mortgage on the 8.84-acre tract of land, (3) decreeing that plaintiff Ivy is entitled to first priority to the proceeds of the sale of the 8.84-acre tract, and (4) reserving to Ivy the right to proceed against Makar and the Sheriff for the balance of the proceeds of that sale to the extent of his judgment. Intervenor Makar has appealed from that judgment.

Makar contends, first, that the $2,000.00 note on which the judgment of June 19, 1967, was partially based, was paid in full before that judgment was rendered, that the debt evidenced by that note thus was extinguished by payment before Ivy acquired it, that the note thus was unenforceable and that plaintiff is not entitled to judgment against the Days for the amount of the $2,000.00 note. He argues that the mortgage which secured that note fell when the principal debt was extinguished, that Ivy was not a holder in due course of the note, that his claim is subject to any defense which might be urged by the makers, ancj that “a note once paid cannot be revived unless it is clearly and definitely a collateral mortgage and puts the public on notice.”

We have concluded that under the circumstances presented here Makar is precluded from urging or attempting to show that Ivy is not entitled to judgment against the Days on the $2,000.00 note on the ground that that note was paid and the debt was extinguished prior to the rendition of the June 19, 1967, judgment. The defense of payment or set-off is a special defense which is personal to the debtor, and in the absence of allegations of fraud it generally cannot be pleaded or asserted by a third opponent or intervenor. LSA-C.C.P. Art. 1094; Galloway v. Levitt, 135 So.2d 798 (La.App. 2 Cir. 1961); Pringle Assoc. Mortgage Corporation v. Eanes, 197 So.2d 160 (La.App. 1 Cir. 1967; reversed on other grounds, 251 La. 711, 206 So.2d 81).

We agree, assuming that Ivy was not a holder in due course of the note, that in the original suit Mr. and Mrs. Day could have pleaded and asserted the special defense of payment. Makar, however, could not have made that defense for defendants even at that stage of the proceedings, in the absence of allegations of fraud and of some pecuniary interest. The Days did not appear or plead that special defense, and a default judgment was ren[140]*140dered against them. That judgment has now become final. We think the rendering of that judgment settled most of the questions relating to the indebtedness of Mr. and Mrs. Day to Ivy. It determined finally that as of the date of that judgment the Days owed Ivy the face amount of both of the above mentioned notes, with interest and attorney’s fees, and that the mortgages securing those notes are valid and enforceable. Makar does not have the right to attack that judgment collaterally. He thus is barred from attempting to show in this proceeding that the mortgage notes held by Ivy were extinguished by payment.

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Related

Makar v. Ivy
291 So. 2d 861 (Louisiana Court of Appeal, 1974)
Ivy v. Day
255 So. 2d 772 (Supreme Court of Louisiana, 1972)

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Bluebook (online)
254 So. 2d 136, 1971 La. App. LEXIS 6528, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ivy-v-day-lactapp-1971.